Fed Clears Revised Capital Plans by Goldman, JPMorgan

The Federal Reserve didn’t object to capital plans resubmitted by Goldman Sachs Group Inc. and JPMorgan Chase & Co. to address weaknesses in their earlier proposals.

The central bank disclosed its decision Monday in a statement. While the Fed approved capital plans from the two New York-based banks in March, they were required to resubmit them by the end of September after deficiencies were found in projections of revenue and potential losses, a Fed official said at the time.

Regulators, intent on preventing a repeat of the 2008 financial crisis, have run annual stress tests to see how the largest lenders would fare in a recession or economic shock. Banks need Fed approval to continue raising their dividends and increasing share buybacks.

“We are pleased that the Fed determined that our CCAR process improvements met their expectations,” JPMorgan Chief Executive Officer Jamie Dimon said in a statement, referring to the central bank’s tests by their formal name, the Comprehensive Capital Analysis and Review. His bank is the largest in the U.S. by assets.

Goldman Sachs and JPMorgan exhibited weaknesses in their capital planning that were “significant enough to require immediate attention, even though those weaknesses do not undermine the quantitative results of the stress tests for that firm or the overall reliability of the firm’s capital-planning process,” the Fed said earlier this year.